Adding greater emphasis to a risk-based approach (‘RBA’), capital markets intermediaries (‘CMIs’) will be required to perform a general risk assessment regarding their money laundering and terrorism financing risk. A similar risk assessment must be performed for new products, new business practices and the use of new technologies.
Many of the proposed changes formalise existing supervisory expectations and practices for CMIs. In particular, the revised regulations elaborate on the steps CMIs should take to identify and verify non-individual customers, such as companies and trusts, and their beneficial owners and formalise the screening of customers and their connected parties. CMIs are to ensure that enhanced customer due diligence (‘CDD’) requirements are also applied to the family members and close associates of Politically Exposed Persons (‘PEPs’) and greater emphasis is given to the country and jurisdiction where the client is from or in and related qualifications by the Financial Action Task Force (‘FATF’). New regulations are introduced when CMIs provide correspondent services to foreign FIs. Within financial groups, the exchange of information for anti-money laundering (‘AML’) and countering the financing of terrorism (‘CFT’) is strongly encouraged.
Comments can be submitted to the MAS until 14 August 2014. For more information, please read our regulatory update on the Consultation Paper On Proposed Amendments to MAS Notices on Prevention of Money Laundering and Countering the Financing of Terrorism (‘AML/CFT’) – Proposed Amendments to MAS Notice SFA04-N02.